Ewing audit - seven months late - faults township money handling

EWING - Vendors were not paid in a "timely manner," bad checks were not investigated promptly, purchase orders were not properly authorized, and internal overrides allowed officials to spend more money than was in the budget, according to an audit for fiscal year 2009 that cites several "material weaknesses" in the township's budgeting.

Roughly seven months overdue, a report about financial practices finally landed in council's hands Monday and sounded alarm bells for some members about apparently shoddy practices.

"It looks like the administration didn't properly monitor the expenditures during the year," said Councilwoman Kathleen Wollert. "Just in looking over this, they've done things that were not in compliance with the law, which is concerning. It's really kind of unbelievable."

Council President Joseph Murphy has asked that members of Mercadien Group, which prepared the 88-page audit, be present at an August meeting of council to help them understand the significance of the findings, which some remain unconvinced are grounds for worry.

Councilman Donald Cox cautioned that not everything reported in the audit is as serious as it might appear, but he said he intends to read it thoroughly in preparation for the public presentation.

Township attorney Michael Hartsough agreed with Cox. "Any time you've got comments like this," he said, "you have to look at the specific instance they are referring to. Sometimes they are very minor things."

The audit covers the fiscal year that ended June 30, 2009 and should have been presented to council within six months of the close of the fiscal period. "We've been asking for it for about four months now," Council President Joseph Murphy said. "It's very late."

Mayor Jack Ball withheld comment on the report saying he is still reviewing it. Business administrator David Thompson was not available for comment yesterday.

There were 16 findings and recommendations in the audit report.

Among the findings, auditors said the use of an "override feature" in municipal software allowed officials to spend more than was budgeted. "An override of internal control resulted in overexpenditures," the audit read. "We recommend that the override feature within the municipal software be disabled to avoid overexpenditures in future years."

In addition, the report found "a lack of checks and balances in place to review transfers made within budget line items." The audit cited this as an instance of noncompliance with state statues.

According to the report, "a lack of internal control policies and procedures" was the cause of multiple financial discrepancies or concerns, some of which have led the township to be in violation of state laws and regulations.

Findings concerning "inter-nal control over financial reporting" were reported to have "material weaknesses," as well as "significant deficiencies," the report states.

In addition, the report found "a lack of checks and balances in place to review transfers made within budget line items." The audit cited this as an instance of noncompliance with state statues.

"It's kind of hard to keep track of the funds without being told how they are spent and what account they are being taken out of," Murphy remarked, in reference to findings of unclear records or documents that were not available for auditors to review.

"We're not happy about it," he said of the audit report. "I think things have to change in (town) hall."

Key findings in the Ewing Township Fiscal Year 2009 Audit

• The "override feature" on municipal software allowed the township to spend in excess of its budget.

• Auditors were unable to examine a certificate of availability for one bid contract.

• There was "inadequate monitoring of individual grant balances."

• In many instances, "wire transfers were not approved in writing by the authorized individual."

• Bad checks were not evaluated in a "timely manner."

• The township "did not monitor its receipts function of the construction department."

• Some invoices were not paid to vendors in a timely manner.

• In six instances, "purchase orders were missing required approvals."

• "Dog reports" were not filed to the state Department of Health and Human Services in a timely manner.